Tag Archives: #Jumbo

Understanding Your Credit Score

The credit score is a tool mortgage lenders and other financial institutions use in determining the financial health of a prospective homebuyer.

The credit score, such as the FICO score is a financial term, and is important when mortgage lenders are pre-approving you and pricing the interest rate for your new mortgage loan.  A FICO score which is short for Fair Isaac & Co, is one of three credit scores mortgage lenders use. A credit score is a snap shot of your credit report on a specific date and time.  Your credit score measures your ability to pay your debts in a timely manner.

In most cases applicants with a higher credit scores are considered better risks and receive better interest rates while individuals with lower credit scores may receive a slightly higher interest mortgage.

Credit Scores and Mortgage Rates

Most credit scores range from 300-850. For example, a credit score of 760 and above indicates a better credit worthiness than a credit score of 679 which suggests the loan may be a little risky and may command a higher interest rate.

Factors Affecting Credit Scores

Your credit score is based on a credit report compiled by one of three licensed credit bureaus in the United States Experian, TransUnion and Equifax called a Residential Credit Report. Due to the differing reports provided by these credit bureaus, one person may have three completely different credit scores.

Although the model used in determining your credit score from your credit report is not made public, Fair Isaac and Company have listed the following factors as having the most bearing on the generation of your credit score:

Payment History

A history of late payments, bankruptcy, foreclosures and other negative actions lead to lower credit scores.

High Credit Balances to Credit Limits

Credit scores consider your existing debt and the available balance in your accounts.  In most cases your credit score will be affective if you carry balances on your credit cards or 30% of the high balance limit.

Length of Credit History

How long your accounts have been created is accounted for when generating a credit score.  This factor rewards an account with a proven history of sustained credit.

Type of Credit

A diversification of different accounts of credit is sometimes rewarded. People who have lines of credit in different types of accounts such as credit cards, retail store cards, consumer finance and mortgage may be a benefit to their credit scores.

Recent Credit Requests

Multiple requests for credit in a short period of time (90 to 120 days) may be considered a risk and thus reduce your credit scores.

In short, your credit report and credit scores serve as representation of what your credit worthiness is to mortgage lenders.  Please let me know if you have any additional questions regarding credit scores.

Call Me Today 916-722-0395, Email Me Today kathleen@wcmtg.com or visit my website www.kathleenbeck.com   Let’s start you down the road to home ownership now!

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Fixed Rate Loan vs. Adjustable Rate Loan

Fixed Rate Mortgages and Adjustable Rate Mortgages (ARM) are two loan options for homeowners and homebuyers. While the growing marketplace offers so many varieties within these two categories of loans, the right selection of the mortgage for your needs can be little difficult. To choose the best option for your new home purchase or refinance, it is good to find out a few details about both these loan options in advance.

Fixed Rate Loans:

The fixed rate loan is a set interest rate that is fixed at the time of loan approval and stays same throughout the lifetime of the loan. Fixed rate loans are generally more stable than adjustable rate loans.  Most people like the fixed rate loan because they know what to expect when it comes to budgeting.  A fixed rate loan is generally 1% to 1.5% higher than the start rate on an adjustable loan.


  • Irrespective of the changes that happen in the broader economy, the payments and rate for fixed-rate loans stays constant.
  • The stability of these loans provides easy budgeting solution to homeowners.
  • The terms and conditions are easier to understand, and they are suitable for both home buyers and refinances.


  • If a homeowner wants to lower the interest rate, the fixed rate loan holder needs to refinance.
  • You do not have a lower start rate.
  • Most of the fixed rate loans cannot be customized.

Adjustable Rate Loans:

As the name implies, in this case, the interest rate is adjustable. The initial interest rate of the Adjustable Rate Mortgage (ARM) is generally below the fixed rate.  After the initial, start rate period most ARMs adjust annual on the anniversary of the first payment.  The new adjustable interest rate is set 45 days ahead of that date.  However, there are ARMs that adjust as frequently as every month!


  • It features lower interest rates, so people may qualify to buy larger homes than they otherwise could.
  • The adjustable-rate loans allow borrowers to take advantage of falling interest rates without refinancing.
  • It can help loan borrowers to invest more money with the savings they see on their monthly payment.
  • These mortgages offer a lower start rate for borrowers who move often.


  • The payments and interest rates may rise significantly throughout the life of the loan.
  • The terms and conditions involved in the ARM are quite difficult to understand. Sometimes borrowers get trapped by shady loan companies.

Many variables play an essential role in the final decision between the ARM (adjustable rate loan) and fixed rate loan. Please feel free to give me a call with any questions and allow me the opportunity to help you find the perfect loan for your situation!

Call Me Today 916-722-0395, Email Me Today kathleen@wcmtg.com or visit my website www.kathleenbeck.com   Let’s start you down the road to home ownership now!

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When To Talk To A Mortgage Professional

Pre-Approval for Peace of Mind!

Buying a home is the largest purchase most people will ever make.  The question of when to speak to a mortgage professional sometimes doesn’t occur to new home buyers until they find a home they are interested in and then it is too late!

The first step in the house hunting process should be a conversation with me. This is called a Pre-Approval.  I will help you figure out how much of a monthly payment you feel comfortable with and can afford.  I will do this by looking at your income and debt structure, where you currently work and live and how much you have available for a down payment, closing costs and other expenses associated with buying a home.

Once I have reviewed all your loan documentation I will present you with a Pre-Approval Letter you can give your Realtor. The Realtor may call it a “Pre-Qual.”  The letter states you have been PREAPPROVED for a home loan under our BUYER READY PROGRAM.  This puts you in the best position to expedite closing of your loan. Your file has been conditionally approved based upon the review of an acceptable credit report, verified bank statements with sufficient cash to close, a completed loan application, verified employment and/or income as of the date of this letter.

When you find your dream home, having a Pre-Approved Home Loan gives you and your Realtor a certain amount of confidence and a definite edge in the market place.  First it will help your Realtor focus on homes within your budget and your ability to finance.  Secondly it will give a seller the confidence that you are Pre-Approved and serious about buying their home.  Many times, sellers look closely at the Pre-Approval and the lender behind the Pre-Approval when considering multiple offers on their home, after all, you are ready to buy a home.  My website has a Pre-Qualification form you can easily fill out and transmit to me electronically. Call Me Today 916-722-0395, Email Me Today kathleen@wcmtg.com or visit my website www.kathleenbeck.com   Let’s start you down the road to home ownership now!

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How Much Home Can I Afford?

This is a common question asked by people who are thinking about buying a home. Generally, lenders will use the 36% as a general guideline when determining how much home you can afford as a borrower. To figure out how much you can afford, take your monthly income and multiply it by 36%, this will give you an idea of the mortgage you can afford.

For example, if you earn $50,000.00 a year, that is about $4,166.00 a month. With that average household income, you can afford $1,500.00 in total monthly payments, according to the 36% rule.

Key factors in calculating affordability are 1) your monthly income and stable employment for the last two years; 2) available funds to cover your down payment and closing costs; 3) your monthly expenses; 4) your credit profile.

  • Income – Money that you receive on a regular basis, such as your salary or income from investments. Your income helps establish a baseline for what you can afford to pay every month. Most lenders will use a two-year average if your income fluctuates month to month.
  • Funds available – This is the amount of cash you have available to put down and to cover closing costs. You can use your savings, investments or other sources.
  • Debt and expenses – It’s important to take into consideration other monthly obligations you may have, such as credit cards, car payments, student loans, groceries, utilities, insurance, etc.
  • Credit profile – Your credit score and the amount of debt you owe influence a lender’s view of you as a borrower. Those factors will help determine how much money you can borrow and what interest rate you’ll be charged.

Further considerations when buying a home should also include how much of a down payment you will need to secure your loan! Also, it is a good idea to have at least three months total monthly expenses in reserve to cover you in the event of an emergency. For more questions about buying your first home, please call me with any questions!

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3 New Year’s Resolutions For Your Home in 2018

New Year's Resolution Calendar

#1 Streamline Your Stuff

Every year we get a lot more stuff, some stuff is for use personally, and other stuff is for the home. Take this time at the New Year to go room by room, closet by closet, and get rid of the stuff you don’t use or need anymore.
Any clothes that have not been worn since before last New Year can be donated. Clutter and nick knacks that seem to have been a part of the home since before you can remember is probably a good candidate of things that have to go. Head to your favorite store and pick up some new and clutter free storage ideas for those out of control places, such as the shoes at the front door, back packs and brief cases in the front room, remote controls and gaming controls near the tv, and laundry that collects on the floor of all the rooms with humans!
The garage is also a candidate to go through and remove and donate, dispose of or recycle anything that seems to just take up space but gets little or no use anymore. These things may have some kind of emotional value, or “what if I need it” mentality, but once they are gone you will hardly miss that stuff!

#2 Make Your House Safe and Sound

This is something many people just don’t even think about. It’s like changing the batteries in your home smoke detectors when the time changes twice a year. But other parts of your home need attention too!
Be sure to check your dryer vents behind the dryer need to be cleaned out because dryer lint is so combustible. Clean the vent and any ducts you can access. Check your batteries in your radon detector too, wait what? You don’t have a radon detector? This odorless gas is deadly and every home should have one of these along with your smoke detectors!
This is a good time to check that all your vents from the attic are all clear too. Critters can get in there and damage the vents or they become blocked, which means your house cannot breathe and is susceptible to mold. Finally, this could be a good time to test your home for lead or asbestos for homes remodeled or built prior to 1978.

#3 Keep It Clean With A New Plan

Having a solid plan to keep the house clean and clutter free will help you enjoy your home on a daily basis, because who doesn’t like a nice clean home?
First make a schedule for the daily cleaning chores, such as dishes, laundry, wiping down the shower, taking trash out and cleaning up clutter from the bedrooms. Having different family members responsible for these chores will help ensure no one person has to do it all and everyone is invested in the plan.
Next have Weekly chores such as mopping, vacuuming, dusting, garbage day and sweeping and cleaning the entry ways to the house. Anything not needed to be done on a daily basis would be perfect for this plan.
Finally, make a plan for the monthly chores or to dos. Maybe it is clean the closets, take a load to the thrift store, and dust the blinds, house fans and curtains. Walk the house and replace burned out lights, vacuum the furniture and do a clutter walk, to make sure nothing is popping up at those trouble spots!
These three New Year’s Resolutions should make for a happier and cleaner home, adding to everyone’s enjoyment and comfort! Be sure to follow me on Facebook and feel free to call me at (916) 722-0395 with any questions regarding your mortgage or refinancing!

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Interest Rate and APR…What’s The Difference?

An annual percentage rate (APR) reflects the mortgage interest rate plus other charges.

There are many costs associated with taking out a mortgage. These include:

  • The interest rate
  • Points
  • Fees
  • Other charges

The interest rate is the cost you will pay to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan.

An annual percentage rate (APR) is a broader measure of the cost to you of borrowing money, also expressed as a percentage rate. In general, the APR reflects not only the interest rate but also any points, mortgage broker fees, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.

Why have both?

“The biggest difference between the two is that the interest rate calculates what your actual monthly payment will be,” says Kathleen Beck, Mortgage Lender, “while the APR calculates the total cost of the loan. A homebuyer can use one or both to make comparisons when shopping for loans.”

As an example, a loan with a 4.25% rate will have a lower monthly payment than a loan for 6.5%, assuming both loans are fixed for the same term.  Which means the total cost of the 4.25% APR will be less than the loan with the 6.5% APR.

How long you will stay in your home matters

If you plan on staying in your home for the entire 30 year mortgage, it makes sense to go with the lowest APR because you will end up paying the lowest amount for your house.  But if you know you are not going to be living in that house that long, it could make sense to pay fewer upfront fees and get a higher rate and a higher APR because the total cost will be less over the first few years.

“Because the APR spreads the fees out over the course of the entire loan, you get the most value only if you stay in the home throughout the entire mortgage.” Kathleen says.

The Right Lender is Crucial

Kathleen says “If you are planning on staying in your home for a shorter period of time you need to do the math and figure out your break-even point. A good lender will help you do that, I will help you do that!” You need to know if you are going to lose money by paying for a lower APR, but end up moving sooner than your break-even point!

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Things NOT to do before escrow closes

I am going to write another blog about what to expect at your mortgage closing, but I feel it is equally important to point out the things that you should stay clear of before we even get to the closing, because these things could put the whole mortgage at risk!

These are the things you should not do before you close escrow.

Changing Jobs

Lenders prefer a steady and consistent job history, and your whole mortgage to this point has been based on your current income history. Any changes in your employment at this point such as changing jobs, companies or becoming self-employed could spell disaster to your ability to purchase your home. At the very least, it could put the process on hold while the lender re-evaluates your financial position.

Making Big Purchases

Yes, you are getting ready to move into that new home and you need new furniture or appliances or you want to celebrate with a trip to Cancun, or maybe even want a new car to make your commute from your new home more enjoyable. All of this is definitely a bad idea! Your loan is based on something called “debt to income ratio” and it was calculated based on your current debt. Adding any more debt at this point will change that ratio not in your favor! Even buying these things with a cash reserve you have set aside is a bad idea, because you would have had to disclose your savings during the mortgage process and this was all taken into account when you were approved. So for now, do not make any purchases with any type of credit or cash savings. Wait until you have closed escrow and have the keys to your new home.

Paying Your Bills Late

This should be self explanatory, but you don’t want to be late on your car payments or credit card payments now, when your new home hangs in the balance. Be sure to stay current on all debt before and during the escrow process. Of course, you want to continue to stay current and pay off that debt even after you get the keys to your new house!

Opening/Closing New Credit Card Accounts

This is just a bad idea during your escrow. There is nothing to be gained by having more debt and opening new accounts could impact your credit status. The same is true for closing accounts, even though that may seem counter intuitive; closing accounts during the escrow could affect your credit rating. Now, sometimes lenders will ask you to pay off small debts in order to get your debt to income ration down to an acceptable level, but that is a request the lender will make, otherwise, just keep paying your monthly payments as usual.

Being Unreachable

The escrow process only last about 30 days on average, and during this time, your lender should be able to reach you easily. Don’t travel to remote places where you cannot be reached. Don’t get a new cell phone number, unless you give it to your lender first thing. Don’t take extended vacations, or travel to places you may not be able to get back from in time to close escrow. Many times during the closing there are small or large glitches, and the lender needs your attention right away, Not being available could push back the closing date on your new home.

These are just the big ones, and the ones that could impact you the most. Please feel free to contact me any time if there are questions about your closing. It is better to get the answers ahead of time, rather than dealing with a potential issue during the closing process. I am always available to help make this process easy and get you into your new home!

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Using Gift Money To Secure Your Loan

Congratulations on your decision to buy a house! Chances are you may be getting a gift to help secure the mortgage on that house, so we wanted to give some guidelines in receiving and using that money!

Conventional –Fannie Mae
Gift Donors may be a relative, such as the borrower’s spouse, fiancé, domestic partner, child (or other dependent), or any other individual related by blood, marriage, or adoption (or legal guardianship).

  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

Conventional – Freddie Mac

  • Gift Donors may be a relative, such as a blood relative, spouse, fiancé, domestic partner, or legal guardian.
  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

FHA Loan

  • Donors can be a relative as defined below*, or a close friend with a clearly defined and documented interest in the borrower.

”Relative” is defined as follows, regardless of actual or perceived sexual orientation, gender identity, or legal marital status:

    • Child (son, stepson, daughter, stepdaughter, foster child, or adopted son or daughter, including a child who is placed w/the borrower by a legal adoption agency)
    • Parent, step-parent, or foster parent
    • Grandparent, step-grandparent, or foster grandparent
    • Spouse or domestic partner
    • Brother or step brother
    • Sister or stepsister
    • Uncle or aunt
    • Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law

VA Loan

  • You must be able to document that the gift funds come from an acceptable source — a family member or someone with a family-like relationship — with a legitimate paper trail via a bank account or financial institution.
  • No one involved in the loan transaction, including the lender, can be the source of the funds.

Who ever gifts you this money is helping you achieve a dream, and could position you in a great spot with regards to your new mortgage! Be sure to thank them in a grand way for their generous gift!

Kim Kirk – SPMC.com

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Understanding Mortgage Insurance Q&A

By: Kathleen Beck, Mortgage Lender

West Coast Mortgage Group

NMLS #243181 | BRE #01058848

Mortgage insurance is an important element of the loan process if you have a low down payment, yet many first time borrowers aren’t very familiar with what it is and how it works. Mortgage insurance helps borrowers lower the risk they are placing on lenders for qualifying them for a loan with a low down payment. There are two types of mortgage insurance, “Borrower Paid” and “Lender Paid.” Understanding the difference between borrower and lender paid, and why utilizing this insurance option could benefit the buyer as well as the lender.

Here are some great questions and answers that I have provided my clients that all borrowers may also find useful.

  • Q – Who needs mortgage insurance?
    • A – Most borrowers making down payments fewer than twenty percent of the purchase price need to obtain mortgage insurance.
  • Q – What is the purpose of mortgage insurance?
    • A – Mortgage insurance lowers the risk the lender making a loan to you holds, so you can qualify for a loan.
  • Q – What is Borrower Paid Mortgage Insurance (BPMI)?
    • A – BPMI is insurance on your loan for the lender when a borrower has a low down payment and a lender is looking for assurance that the loan will be paid in full and on time. If a borrower decided to utilize BPMI, the lender charges a yearly premium paid in monthly installments.
  • Q – What is the average a borrower will pay a lender for their BPMI?
    • A – On average, BPMI premiums costs between 0.3 and 1.15 percent of the total loan amount.
  • Q – What is Lender Paid Mortgage Insurance (LPMI)?
    • A – LPMI is mortgage insurance that the lender pays for the insurance premium instead of the borrower. The cost of the LPMI is reflected in a higher interest to the borrower.
  • Q – Does mortgage insurance increase your monthly payment?
    • A – Mortgage insurance does increases the cost of your loan.
  • Q – Will the mortgage insurance payment be included on my monthly payment statement?
    • A – Yes, mortgage insurance will be included in your total monthly payment.
  • Q – If I default on my payments and the insurance kicks in, what will happen to my credit and my home?
    • A – If you fall behind on your monthly payments, your credit score may suffer and there is a possibility your home could foreclosure.

There are multiple loan options available to borrowers with low down payments. I enjoy working with my clients to help them find the down payment and loan that best fits their financial needs and I always recommend that they ask questions and maintain communication throughout the lifecycle of their loan. The last tip I would like to leave you with is, once the loan is paid down some, you may be eligible to cancel your mortgage insurance. If you are able to cancel, you won’t have to continuing to pay the monthly insurance expense.

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2017 Increasing Loan Limits

With so many changes taking place as we transition into this New Year, the Federal Housing Administration (FHA), Fannie Mae, Freddie Mac and VA increased loan limits for the first time since 2006! Two large changes that have helped create this shift are the steady rise in property values and the housing market continuing to recover. The new limits will be considered for borrowers looking for lending on or after January 1, 2017, and will remain in place through the end of the year.

The maximum loan limits have increased across the board, mainly being seen through one-unit properties as well as in high cost areas and FHA-insured Home Equity Conversion Mortgages (or reverse mortgages).

Maximum loan limits:

  • One-Unit Properties – Increase from $417,000 to $424,100(Sacramento Tri-County area).
  • High-Cost Areas – Increase from $625,500 to $636,150.
  • FHA-Insured Home Equity Conversion Mortgages (or reverse mortgages) – Increased to $636,150.

These increases mark a rising confidence in borrowers ability to repay their loans and have lead to more options for buyers when it comes time to choose a home due to a wider variety of financial lending options.

It is important to understand that lenders still work diligently to get borrowers approved and the documentation requirements have not changed. These increasing lending limits have allowed me to create a competitive landscape for my clients, focused on providing more financial lending options.

For more information regarding these lending limits shifting and the requirements for buyers to make a home purchase, I am always available to help my clients, friends and family and look forward to the new opportunities these increased loan limits will create for buyers in 2017.

#Mortgages #LoanLimit #Market #RealEstate #Lending #HomeOwnership #Jumbo #FHA #VA #Conventional #Refinance #Millennials #BabyBoomers #2017 #Sacramento #BayArea #HomeBuyer #CreditScore #KathleenBeck #TrustedMortgageLender

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